A Company Issued $1,000,000 of 10% Notes That Resulted in Interest

question 103

Multiple Choice

A company issued $1,000,000 of 10% notes that resulted in interest expense of $100,000 per year. What is the company's net cash outflow if the effective tax rate is 40%?

• A)$100,000
• B)$ 60,000
• C)$ 40,000
• D)$160,000

---

Definitions:

Obese People

Individuals who have a body mass index (BMI) that is significantly higher than the recommended range, often leading to health concerns.

Stigmas

Characteristics of individuals that are considered socially unacceptable (e.g., being overweight, mentally ill, sick, poor, or physically scarred).

Socially Unacceptable

Behaviors or practices that are contrary to the norms or values of a society or community.

Overweight

A condition characterized by having more body fat than is optimally healthy, often measured in terms of body mass index (BMI).